Honestly, the conversion was probably the lowest risk move Valve could have made(short of a new IP) for Free-to-play conversion.
When Valve moved the game to F2P, the game was out for almost 4 years. By that point, basically everyone that was ever going to buy the game had purchased it. Plus, Valve already had the loot chase built into the game(random drops were added in 2009, IIRC). And while it's popularity wasn't waning, it was still usually the third place game on Steam's total users list behind CS:Source and CS 1.3.
So they basically had full market saturation for their product, and probably weren't seeing much new revenue even when they did major content updates. By making the game free, they opened the door to a LOT more people, and allowed them to get a lot more revenue from both new and long time players. I've spent probably somewhere around $40 in hats and weapons since the conversion.
The truly brilliant thing that Valve did was make the transition absolutely seamless for the veteran players. Outside of a few new buttons on the main menu and a very unobtrusive news section that advertised changes, the overall experience didn't change at all for them.
Not that it's massively important, but since it's fairly important in my company I feel the need to correct you: CS 1.6 since 2003! 1.3 is commonly considered the best version, though.
